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Third-party candidates attack Federal Reserve System

Constitutionalists and Libertarians have always been opposed to the Federal Reserve System. However, in the wake of Ron Paul’s unprecedented exposure of the issue — and the public’s surprising enthusiasm for his anti-Fed rhetoric — CP and LP candidates are giving the issue more prominence in their campaign platforms. Here are what two leading third-party candidates for U.S. Senate have to say about the Fed on their campaign Web sites:

The Federal Reserve is, quite literally, an international counterfeiting ring that has been granted exclusive authority by the US Congress to create money from absolutely nothing. In most cases, they do not even bother to print their phony Federal Reserve Notes. Instead, a few more zeros are simply added to a digital balance sheet.

Two interesting facts about the Federal Reserve – a) it is not federal, and b) there are no reserves. In actuality, the Federal Reserve is an international cartel of private banks that has formed a partnership with the US government for the sole purpose of enacting laws that allow the cartel to continue creating money from absolutely nothing -with no competition!

The Federal Reserve creates this money out of thin air, (nearly a trillion fake dollars were created just last year!) and injects it into the economy through the banking system – often called “liquidity.” The international private banks that comprise the Fed then get to charge an exorbitant fee – which they get to keep – to anyone who wants to use this “money” – which is obviously a pretty sweet deal. Congress wins too, as it has unlimited access to this vast sum of created wealth simply by forcing the American people to the pay the cartel for the privilege of using it – which is conveniently extorted from us at gunpoint by the IRS.

The local banks are in on the scam as well. They take this “money,” which came from absolutely nothing, and multiply it by up to 90 times (yes, ninety times!) to use for car loans, mortgages, etc. This phony money is loaned to us at whatever confiscatory interest rate they can get us to pay.

“Wait a minute,” you say, “the banks can collect interest – for 30 years – on money they created out of thin air? How can I get a piece of that action?” Sorry ole buddy, you and I would be hauled off to jail if we tried to pull a stunt like this. This form of robbery is reserved for a very special, well connected, breed of counterfeiter. Take a look at this short course on fractional reserve banking.

As these huge new piles of phony money enter the banking system, the phony money already in circulation becomes even more worthless, which leads to higher prices. We choose the relatively benign sounding term “inflation” to describe this giant rip off, as if some immutable force of nature is the cause of our declining lifestyle. But, make no mistake – this is a brilliantly contrived plot to pick the pocket of every American.

Never before in the history of the world, has a such an elaborate scheme of larceny been perpetrated on such a grand scale, with the willing participation of the victims. It is time to put this rogue group of bankers out of the money printing business. Get a copy of “The Creature from Jekyll Island” by G. Edward Griffin for more on this.

The Federal Reserve Act of 1913 is not only unconstitutional, it has been absolutely ruinous to our nation’s economy. Since the Fed has come into being, the U.S. dollar has lost 95% of its purchasing power — and yet the defenders of the Fed tell us its purpose is to “keep inflation under control.”

The fact of the matter is that only the government and its central bank can cause inflation. They do this by expanding the money supply. Each time the Fed creates new money, it diminishes the value of your dollar-based financial holdings. It thus imposes a hidden tax — the “inflation tax” — and redistributes wealth from the poor and working class to the rich and politically connected.

Since 1971, the U.S. dollar has been a purely fiat currency. At one time, people accepted paper dollars because they knew they could exchange them for gold: The dollar was “as good as gold.” But now people accept dollars only because they’ve become so accustomed to doing so, and because they are legally required to accept them.

The Federal Reserve System of fiat-money central banking is bankrupting our country. We must move away from this unsustainable debt-based financial system and towards a truly free economy. The first step in doing so would be to legalize competing currencies.

Were you aware that its illegal for private businesses to produce gold and silver coins? One such company, Liberty Dollar, was raided by the FBI and charged with “advocating the repeal of the Internal Revenue Code and Federal Reserve” when it was about to release a new issue of coins adorned with Ron Paul’s likeness. All Liberty Dollar wanted to do was give American citizens the option of using constitutional money — but the FBI and IRS said no and seized tons of precious metals from Liberty Dollar and its customers.

We must legalize competing currencies, repeal the unconstitutional legal tender laws that require Americans to accept Federal Reserve Notes, and enforce gold clauses in contracts. If we act quickly, and if the states take the lead by abolishing all sales taxes on gold and silver, then we might be able to transition from the fiat empire of the Fed to a truly free economy before we meet our economic ruin as a nation. But we mustn’t delay. History teaches us that fiat currencies have brought down all great nations in time, and if we do not learn from history, then we shall certainly be doomed to repeat it.

Boman contradicts himself by advocating a free market in money but apparently taking the position that “real money” must be backed by gold or silver.

I am not a free market advocate, but as I understand it, the cogent free market position is that, among other things, money creation should be completely privatized and deregulated, which would mean that if banks (or you or I) want to issue credit money and people want to accept that money as payment for goods and services, so be it.

The cogent socialist position, on the other hand, is that the sort of boom/bust speculative cycles we’ve been seeing recently are an inevitable step in the decline of capitalism that cannot be cured by regulating or deregulating markets, only by replacing markets with another system of allocating resources.

All the other proposals I’ve seen — including the “gold standard” and “greenback” positions — are essentially reformist: We should keep regulating markets but do so differently.

Sometimes these positions are advocated as part of a comprehensive reformist program. In other cases, they are elevated to the level of panacea. That is where we get into crackpottery.

A libertarian supports the right of individuals to use whatever “money” they want, so long as it is truthfully represented and mutually accepted.

A constitutionalist acknowledges that the Constitution does NOT give the federal government the power to declare legal tender, nor does it allow the states to declare anything other than gold and/or silver as legal tender, or to emit bills of credit.

An economic historian recognizes that while under free banking, anyone would be able to issue the money they wanted, historically, gold and silver have been the most widely accepted forms of “money,” and that is likely to be the case if we returned to free, non-coercive banking.

If that is Boman’s position, it may be less crackpottish than Brownlow’s, but I would be a bit more than surprised if a shift to free banking in the 21st Century resulted in a resurgence of gold- and silver-backed money. Lots of things were true historically that are no longer true.

As for arguments from constitutionality, they are fundamentally legal, not political. The Constitution can be changed, and political parties and candidates are free to advocate such changes. Any political party or candidate that says, “We should do X because is the constitutional thing to do,” also needs to explain why the provisions of the Constitution in question should not be changed.

Eric – You are right that there COULD be innovative new forms of money in a free society — money could be backed by bandwidth or something… But I wouldn’t bet against gold or silver.

“We should do something because the Constitution says so” because if the Constitution is not observed, then the government is all-powerful and can do whatever it wants.

Interestingly, the Constitution itself does not declare gold and silver legal tender, nor does it say that states MUST declare one or the other or both legal tender. A state could declare no legal tender whatsoever, and let the market decide. However, what would be done about taxation? If you want to abolish taxes, I’m fine with that, but if the state government needs to collect taxes, it needs to recognize something as money. Gold and/or silver have been recognized as money for millennia, and WERE recognized as the backing of our money (gold, at least) until 1971. The world has changed a lot since then, but has it undone 10,000 years of history in the past 37?

Hal Greenwood was appointed to the Federal Reserve Board by U.S. Presidents Gerald Ford, Jimmy Carter, and Ronald Reagan.

In 1968, Democrat Party Presidential nominee Hubert Humphrey announced that if elected, he would appoint Greenwood to be Secretary of the Treasury.

Greenwood is a scholar of Federal Reserve Board history and has studied G. Edward Griffin’s book ‘The Creature From Jekyll Island’.

Greenwood has not spoken out in public regarding the Federal Reserve in over two decades. He was initially scheduled to speak at the 2006 Libertarian Party of Wisconsin State Convention, but was unable to attend. Greenwood wants the American public to know the truth about the Federal Reserve System, and will reveal hithero unknown secrets for the first time.

Greenwood and Barrett will be on the air from 4 to 6 P.M. central time on Network 4.